Iranian Officials Warn Russia Not to Dismiss U.S. Sanctions Threat

Pro-Russia activists guard a barricade outside the police regional building seized by the separatists in the eastern Ukrainian city of Slavyansk on April 17.

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TEHRAN — Russian President Vladimir Putin has belittled the threat of more American sanctions over the crisis in Ukraine. But Iranian officials and businessmen are privately warning the Kremlin not to be so dismissive.

Government technocrats and bankers in Tehran, during interviews over the past week, voiced astonishment over just how much damage the U.S-led sanctions campaign on Iran has had on their economy over the past three years.

Many said they had initially believed that a large oil-producing country like Iran — or Russia for that matter — would largely be immune to Western financial penalties. They said they didn’t believe European countries would back up Washington’s economic threats, due to the energy supplies and corporate profits they stood to lose.

These Iranians said they had been mistaken, and that Russia should be worried.

“The U.S. sanctions are vicious because they largely just targeted our banks,” said a senior Iranian banker. “The Americans essentially forced businesses to choose between doing business in dollars or dealing with Iran. That’s a no-brainer for most.”

Iran’s oil exports have been cut in half over the past three years after the U.S. Treasury sanctioned Iran’s central bank, Bank Markazi. These sanctions, coupled with the mismanagement of former President Mahmoud Ahmadinejad‘s government, contributed to a deep economic contraction in Iran, which continues, said Iranian officials.

Iran’s new president, Hasan Rouhani, took power in August promising to get the American sanctions lifted through negotiations with Washington over Tehran’s nuclear program.

Both the U.S. and Iran have targeted July to reach a deal. But Iranian officials privately worry about the long-term impact on their economy if the negotiations fail.

The Obama administration says they’re looking to fashion a financial war on Russia from lessons they’ve learned from Iran over the past three years.

Over the past month, President Barack Obama has issued executive orders that allow for the sanctioning of Russian banks if Mr. Putin doesn’t take steps to pull his forces out of Ukraine.

U.S. Secretary of State John Kerry is holding talks on Thursday in Geneva with his Russian counterpart, Sergei Lavrov, on Ukraine. If no progress is made, U.S. officials said they’re preparing to put in place new sanctions on Russian businessmen and companies.

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